From gloom to glimmer

13 May 2003

The Swiss bank s profits beat forecasts, there was a fixed income bonanza and the private bank continued to suck in funds. UBS even thinks it can see the end of the downturn. But there are a few blotches on the picture.

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UBS reported a smaller decline in firstquarter profits than forecast and the Swiss bank's President Peter Wuffli said the end of the bear market could be at hand.

We do feel that the downward pressure on our industry from the business and market environment could be beginning to ease and that the worst earnings declines may be behind us,'' Wuffli said.

Net income dropped to SFr1.21bn from SFr1.36bn a year earlier, hurt by the weaker dollar and a decline in assets. Expenses fell 20% percent from the first quarter of last year as revenue dropped 19%. UBS attributed about half that decline to the US dollar's 20% slide against the Swiss franc.

Pretax profit at UBS Private Banking fell 26% to SFr534m, but the unit continued to draw in fresh funds. Net new money rose to SFr7.4bn, against SFr2.2bn the year before.

At the investment banking unit, UBS Warburg, pretax profit fell by 6% from the year before but rose 72% from the fourth quarter of 2002. Revenues at its fixed income, currencies and commodities unit doubled, from the fourth quarter, while they fell 47% and 32% from the investment banking and equity trading businesses.

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